FCC Doesn’t Have the Authority to Regulate the Internet

The D.C. Court of Appeals today issued a ruling that stated that the Federal Communications Commission (FCC) does not have the authority to regulate internet traffic, thus putting a huge roadblock in front of the Net Neutrality movement. One of the centerpieces of the Nutroots’ agenda, Net Neutrality (like many liberal ideas) is a concept that sounds good and reasonable at first, but in reality is just another excuse to give the government more power. In brief, Net Neutrality is the prinicple that Internet ISPs should not discriminate on the type of traffic that it allows on its site. Again, sounds reasonable. It is proported to allow for the free exchange of ideas and to prevent censorship on the net. However, it would put the power of regulation of the ISPs in the hands of the Federal Communications Commission (FCC).

In reality, ISPs are not censoring people. Some, such as Comcast, are restricting certain types of traffic because of network considerations. You see, if everyone spent time watching full-length, high-def movies online all day, it would crush Comcast’s network (or whatever ISP you happen to be talking about). In reality, it is only a few people who end up trying to do things such as watch full-length high-def movies online all day, so by instituting Net Neutrality, the government would be forcing Comcast and others to either spend billions on infrastructure upgrades to support a relatively small portion of their customer base. The alternative for ISPs is to provide much lower quality of service, leading to angering their customers even more than they already tend to do.

This is not to say that there aren’t some problems with the nation’s broadband providers. Many of them are lazy and do not institute network changes that would benefit most people. Many also do not provide good customer service, or may indeed ban legitimate traffic for no reason. But as usual, inserting the government into the picture will not solve anything, and will make the problem worse, not better.

One of the big reasons a problem exists to begin with is because of lack of competition in the broadband market. Because of deals with states and specific laws, broadband providers (much like health insurance companies) have specific deals with the respective states to form a monopoly or at the very least a duopoly with one or two other providers in a given area. In Massachusetts’, for example, Comcast is the only broadband provider that is available state-wide. Verizon has tried to make inroads with its FiOS offering, but because of the law of the state, Verizon has to literally sign an agreement with every single town in the state, one by one. In one example, Verizon broke off negotiations with one town because that town was asking for too much in kickbacks for it to be worthwhile for Verizon to continue to pursue. Opening up the ISPs to increased competition will solve the problem as smaller, more focused ISPs will be able to pop up and keep the big guys honest.

Today’s court ruling represents a minor victory for capitalism and the free market, and also for liberty. The FCC tried to institute a policy regarding Internet traffic even though they did not possess the statutory authority to do so. The D.C. Court of Appeals saw through the FCC’s ploy, and told it to back down. Not only was this a blow against the nutroots’ dreams of a government-controlled Internet, but it was also a victory for separation of powers, illustrating that executive agencies cannot simply regulate when no law has been passed giving them that power.